In one of the biggest acquisitions in the OpenStack community, Cisco has announced its intentions to acquire Metacloud, a three-year-old company that helps organisations build OpenStack Clouds.

Analysts say the move is about Cisco providing choice to customers. Cisco has a hardware platform for building private clouds, most notably its Unified Computing System (UCS) line of servers. Through a long-standing partnership with VMware, customers can use that company's software to build private clouds. Now, with the addition of Metacloud, customers will be able to more easily than ever build an open source-based OpenStack private Cloud on top of UCS gear. "This gives Cisco another cog in its InterCloud wheel," says Al Sadowksi, who tracks the IaaS market for the 451 Research Group. Intercloud is the name of Cisco's broad Cloud platform that combines customers' on-premises Clouds with a variety of public Clouds.

Metacloud was founded in 2011 by a former Ticketmaster technologist who built a massive private cloud based on OpenStack for the ticket selling company. The other co-founder got his tech roots at Yahoo. The company offers what it calls hosted private clouds for customers, all of which are based on OpenStack. The company's software can either be run on a customer's premise, or in one of Metacloud's five data centers. The company has poached some talent from Rackspace recently, including Scott Sanchez becoming Metacloud's VP of Strategy. Their offering competes with services from Red Hat, Mirantis, Piston cloud Computing Company, Cloudscaling and HP Helion, among others.

The move has some broader ramifications beyond just the Cisco offering though, it shows the continued contraction within the public Cloud IaaS market. HP recently spent a reported $US100 million to buy Eucalyptus. IBM bought SoftLayer; CenturyLink bought Savvis; and Verizon bought Terremark. And it's a significant move in the OpenStack community, and likely the largest acquisition of an OpenStack company since VMware bought Nicira - which was a networking company, not a compute company. Terms of the Metacloud deal were not announced.

Overall, Cisco still has a lot of details to release about Intercloud in terms of which partners will be involved and how it will all work. But, the company is obviously committed to the OpenStack market though, given its investments in the open source project. Now, with Metacloud, if customers want an OpenStack private cloud, Cisco's got a nice hardware and software combination to sell them.

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